Inflation

Inflation Inflation is defined as “a period of rising prices when the purchasing power of the dollar is falling.” What this boils down to is that as time goes by the dollar bills worth decreases while at the same time prices rise. Now when I say the dollar bill’s value decreases I don’t mean a dollar reduces to ninety cents. What this means is that one dollar can no longer buy you a …

…of money and therefore have more to spend on goods and services. However as minimum wage rises so does the cost of goods and services. Since the manufacturer of goods and services now has to pay it’s employees’ larger wages it has to account for that spending by raising prices. In the end an equal balance almost occurs however more money is being spent and transferred throughout the market therefore making the economy stronger.